5 Suggestions For Effective Executive S&OP Meetings

Eric Tinker — Wed, 01 Jun 2011 15:07:15 +0000

Eric Tinker – Nexview Consulting

The Executive S&OP Meeting is the culminating meeting in the S&OP process that is often preceded by a Portfolio Review, Demand Consensus, Supply Consensus, and Pre-S&OP meetings. It’s the S&OP meeting, led by the company’s, or business unit’s senior executive.

The Executive S&OP Meeting is where the management team:

Confirms the summary level operating and financial plan
Makes executive level decisions on items that have been escalated to them
Manages summary level KPI performance

While the Executive S&OP Sponsor should provide guidance to make things work well at this level, here are five suggestions to consider as well.

1. Integrate the Executive S&OP Meeting with the Executive Management Meeting Structure

Most executive teams have a well-defined system of meetings and business reviews as part of their annual calendar. Adding another monthly meeting to an already packed executive life and travel schedule across multiple geographies and time zones will often not be popular. I suggest you make the Executive S&OP Meeting part of the agenda for an already existing monthly meeting. The hitch can sometimes be that the timing of this meeting doesn’t fit into the S&OP calendar flow. Work with your sponsor to move the meeting a week forward or back if possible. If that is not possible or doesn’t help, then you will have to work out some trade-offs where schedules are concerned so that the information can be reviewed in a timely manner, or possibly schedule a separate meeting.

2. Make Sure the Reports and KPIs Are At The Right Level

The Executive S&OP report (i.e. Executive or Company Operating Plan) and KPIs used in this meeting should be at a higher level than those used in Pre-S&OP. For example, in Pre-S&OP you’re usually examining the product family levels for a business unit. In the Executive S&OP meeting it’s one level up, meaning at the business unit, geography, or company level. The level should match the P&L level they are already looking at. You can bring exception-based supporting detail to cover a particular agenda item as required.
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3. Set a Dollar/Currency Level for Exception Items That Go to This Group

This can be an effective objective guideline to help define what needs to go to the Executive S&OP meeting. In some organizations where the accountability definition is shaky this can be a challenge initially. But, I would suggest that you strive to get there over a few months. Exception items that should be discussed for this group are typically big dollar items like capacity decisions, large inventory write downs, significant labor decisions, significant allocations across business units, significant decisions involving third party partners, and risk management involving large dollars.

4. Ensure the Executive KPI Scorecard Balances Operational and Financial KPIs

It is still very common for executive teams to not have an executive level KPI scorecard that balances operational and financial KPIs. Executive S&OP is a great way to fix this and gain support for the overall process. A good scorecard will highlight the results that S&OP generates. Plus, even if you’re fortunate enough to not have these executive exceptions to discuss each month, the management team still need to manage KPIs. Similar to reports, KPIs are at the business unit and company level here.

5. Prepare and Facilitate Well

Most importantly, preparation for this meeting is key. The S&OP process leader does the leg work to coordinate the various parties in order to gain support and foster the development and recommended paths to solving issues coming into this meeting. This means pre-presenting to key executive team members, getting their informal opinions, and defining the next level down team’s recommendation that has dollar implications quantified. While your executive leader presides over the meeting, it’s your S&OP process leader who will typically frame the S&OP issues and facilitate discussion in an efficient manner.

The executive level component of S&OP is a critical one. Please feel free to comment on what has worked in your own organization.

Eric J. Tinker
Principal
Nexview Consulting, LLC

5 Suggestions To Improve Pre-S&OP

Eric Tinker — Mon, 02 Nov 2009 15:33:43 +0000

S&OP Meeting

How many times have you been in a Pre-S&OP meeting that seems to drag on and tie up several high end people who are already overloaded? S&OP is a great and vital process, but sometimes parts of it can be unnecessarily time consuming. This can especially be the case when an organization is implementing S&OP and transitioning from familiar detailed executional level discussions to the product family, longer-term discussions we want in S&OP. Pre-S&OP can be the toughest meeting in the cycle because of the multiple functions and people involved. I once observed a meeting the company called S&OP that had no less than twenty people in the room while the leader conducted conference calls to multiple plants in sequence. The cost of the meeting had a lot of commas and zeros in it, not to mention the pain inflicted on some participants. Here are 5 suggestions to consider to make your Pre-S&OP better:

1. Don’t standardize the meeting – While you should standardize dates for all S&OP meetings way in advance, you don’t need to standardize the participants for Pre-S&OP. Aside from a small core group, only those participants who have plan or KPI exceptions to address really need to attend. The others may want to attend for informational purposes, but leave that up to them.

2. Allow groups to rotate in and out – Everyone doesn’t need to be present for everyone else’s material. It’s nice to share information and practices across business units, but don’t force a common meeting on your organization if they don’t want it. You can still run a standard process by rotating business units in an out. If you have inter-business unit matters to discuss, the prior point governs. Business units will still come together at the next level in Executive S&OP.

3. Confirm the plan virtually – No forward imbalances or deviations from budget that need to be resolved this month? I’ve not seen that too often, but celebrate your success (or luck!) when that happens. Don’t force a meeting when you don’t need one. Make sure KPIs are OK though before foregoing the face-to-face meeting.

4. Discuss an ad-hoc improvement topic – Members of the group will always be working on some improvement effort. If you don’t have a structured change program going on, their interface needs are likely being handled informally. Perhaps a 10 minute slot in the Pre-S&OP could be a good place for them to celebrate a success or build momentum for cross-functional support. Don’t solve those kind of issues in this meeting though, create an awareness, commitment to address, and take it off-line.

5. Invite a rotating executive to participate in the meeting – Having an occasional invited guest from the Executive S&OP will give this person more exposure to the process (perhaps education in some cases) and could generate more support at the next level and within the Pre-S&OP group. This person could also give an update of their area or other topic of interest. Another thought on this idea is if you have a topic you know is headed for Executive S&OP, having the relevant executive(s) at the Pre-S&OP for that part of the meeting not only gives them some background, but could accelerate the decision process. Just make sure they aren’t put on the spot in the meeting and their presence doesn’t impede any discussion. If this is the case, brief them off-line in the traditional manner.

While all of these aren’t intended to work in all organizations, some may fit yours. What are your thoughts, and have you tried anything to improve your Pre-S&OP? The Institute of Business Forecasting & Planning, IBF and I would enjoy hearing your comments below.

Eric J. Tinker
Principal
Nexview Consulting